The Lemon Fool

Personally, keeping an eye on the US yield curve. It has flattened considerably. If it inverts I will be rapidly increasing my cash holdings.

Investing over 20 years has taught me to expect the unexpected when investing, but to never feel so despondent that I sell any, let alone all of my shares. The latter are solely in a highly diversified world equity investment trust - Foreign and Colonial (FRCL).

Perhaps the market both in the UK and the US will be lower in a couple of years. Who can tell for certain?

As the market rises above fair value, it probably is a good idea to increase the amount of cash by not re-investing dividends. I would say we are 5-10% above fair value for a world equity fund at the moment. Flat returns for a year would bring us back onto the long-term trajectory.

My experience has taught me to be more of an optimist than a pessimist, and not to be frightened by the harbingers of doom. If you are a long-term investor and you own a great selection of companies with good earnings growth, why worry when the market goes south for a couple of years?

It will be a difficult balancing act - if they print enough to avoid deflation, they will almost certainly overshoot and we will finally get some real inflation back into the system, and then they will HAVE to raise interest rates to keep that in control.

With RPI at 4% for the past three months, I think that inflation is well and truly back.

Steve

PS Though no doubt the civil service will soon scrap the CPI as well and formulate some new trendy scheme for keeping the 'official' rate as low as possible.

FredBloggs wrote: Nobody I know is borrowing money to buy shares.

I read this post a few days ago, and then guess what?

A friend of a friend asked for advice on how to borrow £150k against their house, and then invest about £100k of it into equities. They’ve never shown any interest in investing before.

Interesting times perhaps...

Yes but....two years ago an RBS Manager advised investors to sell everything.

google it as I am not approved to post links....

So maybe I should have reverted all my pension investments to cash but felt I would have missed out on some good runs in Gold and other stocks. Currently HL SIP 25% simple cash, 35% miners including a big chunk in Uranium as well as Gold & Silver, the rest in general shares including Astrazeneca, 888, WH, Ladbrokes etc.

This is a high risk strategy but I watch carefully and if caught out by a sudden fall would keep most of my general shares as corrections start to recover within months. I do not hold any Banks.

Snorvey wrote:http://citywire.co.uk/money/rbs-says-sell-everything-in-cataclysmic-warning/a872993

Royal Bank of Scotland (RBS) has told investors to run for cover with 2016 set to be a 'cataclysmic' year for markets.

According to reports, in a note to clients the investment bank said: ‘Sell everything except high quality bonds. This is about return of capital, not return on capital. In a crowded hall the exit doors are small.’


<snigger>

There is a vast industry devoted to frightening investors out of shares so that agents can claim they are offering advice. What is in their business interests is not usually the same as that of investors.

Anyone who recommends doing as little as possible by ignoring capital values and letting dividends and compound interest do the work is roundly attacked by all and sundry as a heretic.

FredBloggs wrote: Nobody I know is borrowing money to buy shares.

Not quite true, I am and have been for years. I'm sure I'm not alone in having a margin account.

Snorvey wrote:If you have a mortgage and are buying shares at the same time then, technically, I guess you are borrowing to buy shares.

Technically you are probably borrowing to buy property, but deciding that your return on equity/bonds is likely to be greater than the after tax cost of the mortgage.

I'd considered the mortgage example quotes above (as it happens ), but decided not to mention it. Perhaps it relates how you consider the 'seniority' of various layers of personal debt...?
My small outstanding mortgage is on about BBR+0.5%, with perhaps another 10 years to run. I could redeem it but it'd make no sense when the FTSE-100, vs which I've similarly small margin, is yielding over 4.x%. I see it as a form of retail arbitrage on the provider's security/liquidity, akin to a 'carry-trade'.

Snorvey wrote:http://citywire.co.uk/money/rbs-says-sell-everything-in-cataclysmic-warning/a872993

Royal Bank of Scotland (RBS) has told investors to run for cover with 2016 set to be a 'cataclysmic' year for markets.

According to reports, in a note to clients the investment bank said: ‘Sell everything except high quality bonds. This is about return of capital, not return on capital. In a crowded hall the exit doors are small.’


<snigger>

Wealth managers and stockbrokers are not interested in their clients, only in wealth transfer into their own accounts. They make up cock and bull stories playing on the current news trend to fleece the naive investor.

Snorvey wrote:http://citywire.co.uk/money/rbs-says-sell-everything-in-cataclysmic-warning/a872993

Royal Bank of Scotland (RBS) has told investors to run for cover with 2016 set to be a 'cataclysmic' year for markets.

According to reports, in a note to clients the investment bank said: ‘Sell everything except high quality bonds. This is about return of capital, not return on capital. In a crowded hall the exit doors are small.’


<snigger>

Wealth managers and stockbrokers are not interested in their clients, only in wealth transfer into their own accounts. They make up cock and bull stories playing on the current news trend to fleece the naive investor.

LooseCannon101 wrote:Wealth managers and stockbrokers are not interested in their clients, only in wealth transfer into their own accounts. They make up cock and bull stories playing on the current news trend to fleece the naive investor.

An invite to an Investment Seminar commented

we'll talk you through what you need to do to protect your money in a crash

I'd suspect that means they would be pushing a structured product.

OhNoNotimAgain wrote:There is a vast industry devoted to frightening investors out of shares so that agents can claim they are offering advice. What is in their business interests is not usually the same as that of investors.

I think that is a slight exaduration. While it is undeniably true that many are paid to offer advice and some are even just paid to write something (ie journalist for the FT or IC), it doesn't follow that "SELL SELL SELL" rather than "BUY BUY BUY" pays them better.

From what I've read and listened to such people are actually spending a good amount of their time talking about Bitcoin at the moment, which means less talking about shares (and of course less time trying to frighten investors).

Seriously (while I've been interested) I've seen the crash when we left the ERM, the Dot com crash and the Banking crash. I honestly believe that I will see at least three more in my lifetime. IT WILL HAPPEN! When, well who can say?

One thing that I'm sure that all the Bears out there will agree with is that after such a event is a great time to invest. Those who held their nerve and didn't sell during the fall have probably still done well.

For what it's worth, while I usually buy every month I have decided to let the cash build up until July or later. Yes I know I'm supossed to wait until May, sell, then invest when St' Ledgers day comes, but so what.

Urbandreamer wrote:

OhNoNotimAgain wrote:There is a vast industry devoted to frightening investors out of shares so that agents can claim they are offering advice. What is in their business interests is not usually the same as that of investors.

I think that is a slight exaduration. While it is undeniably true that many are paid to offer advice and some are even just paid to write something (ie journalist for the FT or IC), it doesn't follow that "SELL SELL SELL" rather than "BUY BUY BUY" pays them better.

.

It is not a question of journalists being rewarded for writing buy or sell. For them the problem is:

"How am I going to fill another 500 word column about the market that does not repeat an earlier one and will keep people's attention but will not upset the advertisers"

and the Bloomberg eye candy is simpering with about 3 inches of make up on and a hair do that looks like it would withstand a hurricane, not to mention the intensingly irritating whining voice. Don't think financial acumen was high up on the presenter selection criteria!

Snorvey wrote:[i]"

Finally, FINALLY they drag the Bloomberg eye candy on just before we all put a gun to our heads and end it all.

Yup.
Should we do a link from this post to Bitter Lemons?

I remember in the 2008 crash being comforted by the cherry lipped, bouffanted hair Bloomberg eye candy. I’m certain that one even had cheekbones the shape of the market decline - sharp and southerly!

Strange they don’t apply the same criteria to male presenters or guests!

[quote="1nv35t] "Those currently near or recently having entered retirement will look back in amazement at how once they felt so rich, to only have seen their lifetime savings lost over such a short period of time leaving them in the most darkest of late life care/lifestyle and a younger generation that simply could not care less (and even welcome such pain being endured by their elders).[/quote]

Where do you reckon is good to emigrate to, with reasonable healthcare costs for your twilight years?
tuk020

TUK020 wrote:Where do you reckon is good to emigrate to

As an alternative, are there still any channels open for staying in the UK and legally 'emigrating' your income-yielding assets to a sunnier tax jurisdiction?